On Feb. 17, 2009, President Obama signed into law the American Recovery and Reinvestment Act of 2009. In this multibillion dollar economic stimulus legislation, Congress and the Administration commit $7.2 billion in new spending to expand access to broadband services. The Rural Utilities Service (RUS) is appropriated $2.5 billion and the National Telecommunications and Information Administration (NTIA) is appropriated $4.7 billion. The major items with regard to the broadband provisions are summarized by Sonnenschein's communications and public policy professionals below.

Rural Utilities Service Funding

Under the statute, $2.5 billion is provided to the Department of Agriculture’s RUS to make loans and loan guarantees for broadband services in any area of the United States, provided that 75 percent of the area served by any project “is a rural area without sufficient access to high-speed broadband service to facilitate rural development.” In addition, the RUS broadband funding decisions are subject to the following six specific priorities:

  • “Project applications for broadband systems that will deliver end users a choice of more than one service provider”
  • Projects that will provide service to the highest proportion of rural residents that currently do not have access to broadband service
  • Projects “from borrowers or former borrowers under Title II of the Rural Electrification Act of 1936” and those that will include such borrowers or former borrowers
  • Applications that demonstrate that, if approved, all project elements will be fully funded
  • Projects that can be completed if the requested funds are provided
  • Projects that can begin promptly after approval  

Finally, projects funded by the RUS and those funded by the NTIA cannot overlap.

NTIA Funding

The remaining $4.7 billion for broadband funding is appropriated to the NTIA, most of which is to be used to make grants in a revitalized Broadband Telecommunications Opportunities Program under which any approved entities, including states, nonprofit entities, and Indian tribes may apply for funds to build out broadband to unserved and underserved areas. The purposes of the grants are to educate and create awareness about broadband opportunities; to improve access to broadband by public safety agencies; and to stimulate demand for broadband, economic growth and job creation. At least $200 million is to be used for competitive grants for public Internet centers, such as at community colleges and public libraries, and at least $250 million is to be used for competitive grants for “innovative programs to encourage sustainable adoption of broadband service.” Applicants will be required to provide at least 20 percent of the proposed project cost, subject to a financial hardship waiver. Grant recipients also must abide by a set of conditions, including build-out deadlines and non-discrimination requirements (see below).

Concurrent with issuance of the Request for Proposals for grants, the NTIA, in coordination with the Federal Communications Commission (FCC), is instructed to publish non-discrimination and network interconnection obligations that will be incorporated as conditions to grant awards to encourage sustainable adoption of broadband service. The non-discrimination principles, also colloquially referred to as “network neutrality” provisions, must include, at a minimum, the principles adopted by the FCC in 2005 in its Internet Policy Statement. An additional $350 million is appropriated to NTIA for broadband mapping operations, which were authorized by an earlier statute but had been unfunded until now.

The NTIA, in consultation with the FCC, also is instructed, within one year, to develop a long-term national broadband service development and expansion plan, and to transfer funds to the FCC as appropriate for this purpose. The plan is to be a comprehensive analysis of mechanisms to ensure broadband access by all citizens and to provide a detailed strategy for achieving affordable and maximum utilization of broadband. The plan also must evaluate the state of broadband deployment, including projects funded by the statute. Finally, the plan must detail ways to use broadband to accomplish a wide-ranging set of public policy objectives, including to further consumer welfare, civic participation, public safety, worker training and energy independence.